We expect Cabela's Incorporated (CAB), the specialty retailer and direct marketer of hunting, fishing, camping, and related outdoor merchandise, to beat expectations when it reports fourth-quarter 2013 results on Feb 13, 2014. In the last quarter, it posted a negative surprise of 2.8%.
Why a Likely Positive Surprise?
Our proven model shows that Cabela's is likely to beat earnings because it has the right combination of two key components.
Positive Zacks ESP: Cabela's currently has an Earnings ESP of +2.13%. This is because the Most Accurate estimate stands at $1.44, while the Zacks Consensus Estimate is pegged at $1.41.
Zacks Rank #3 (Hold): Note that stocks with a Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings estimates. The sell-rated stocks (Zacks Rank #4 and #5) should never be considered going into an earnings announcement.
The combination of Cabela's Zacks Rank #3 (Hold) and +2.13% ESP makes us very confident regarding a positive earnings beat on Feb 13.
What is Driving the Better-than-Expected Earnings?
The strong performance of Cabela's next-generation stores continues to boost its top and bottom line results. We believe that Cabela’s remains on track to continue with its upbeat performance and offers its investors one of the strongest growth profiles owing to its sturdy balance sheet, feasible strategy and operating efficiencies. The company in the last four quarters has outperformed the Zacks Consensus Estimate by an average of 5.8%.
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